1. So what's really going on?
The new policy announced represents a graduated approach to increasing the down payment requirement proportionally to the cost of a home. Canadians who already hold mortgages will not be affected by this announcement. Bill Morneau, the Minister of Finance says "This measure will increase homeowner equity, which plays a key role in maintaining a stable and secure housing market and economy over the long term. It also protects all homeowners, including many middle class Canadians whose greatest investment is in their homes.”
2. What's changing exactly?
Effective February 15, 2016, the minimum down payment for new insured mortgages will increase from 5 per cent to 10 per cent for the portion of the house price above $500,000. The 5 per cent minimum down payment for properties up to $500,000 remains unchanged. This change applies to all purchase homeowner loans where the purchase price of the property is greater than $500,000, but less than $1,000,000.
3. How will the new minimum down payment requirement be calculated?
As an example, ff you are purchasing a $600,000 home: 5% down on $500,000 = $25,000 + 10% down on the balance of $100,000 = $10,000 for a total minimum down payment of $35,000.00. So to be clear, under the new policy you'll be required to come up with $5000 more for your down payment on the purchase of a home of $600,000.00. A purchase of $700,000 would require the buyer to come -up with $10,000 more for their down payment, etc...
How can I plan properly to avoid the increased insurance premium cost?
All new insurance applications received on or after February 15, 2016 will be subject to the increase, however, if your application is received before this date you'll save thousands. Its important to note that this does not mean you need to close/take possession of the new home before this date only that your application has to be received. If your application is submitted before February 15, 2016, and as long as the closing date occurs before July 1, 2016 you can still benefit from the lower premiums.
C/O Published with Brandon Scott at Benchmark Mortgages.
If you have any further questions about mortgages or if you would like your own free consultation with Brandon for a strategy contact Brandon at 780-800-5500 or Brandon@benchmarkab.com
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Include 4 conditions in your offer when buying a home!
Buying a home can prove to be a complicated task. It is not as straightforward as it seems. It is important to pay attention to different conditions, including those that are mentioned below. It will provide you with the guarantee that you will be able to buy safely.
One of the most important things that buyers should check would be the terms for financing. Most people will not be able to buy a new home in the absence of a mortgage. In this case, it is important to take a look at the specifications for financing, such as the interest rate. If there is a need to apply for a specific type of loan in order to complete the purchase, such condition should also be indicated in the contract. All financing terms should be agreed upon by both parties before finally affixing your signature and considering the negotiation as done.
2. Home Inspection
The home that you are going to buy must be subject into inspection. If the seller refuses to make it available for inspection, you have to refuse the offer. Typically, two to three days will be all that you need to have an inspection arranged. If in case the home inspection reveals significant problems with the property, such as structural weakness, you have the right to walk away and look for other properties to buy.
3. Sale of a Buyer’s Home Condition
This is a condition that will make it possible for the seller to bridge mortgages from the old and new home. The premise is that the property of the buyer must be sold first before being able to complete the transaction. Ideally, selling your house is better before buying a new home. Nonetheless, there are some instances wherein buying comes first because of prevailing market conditions. In this instance, sale of a buyer’s home is one essential that should be met.
4. Document Review
While this is something that you can do on your own, a better alternative is to hire the expertise of a third party agency to do this for you. Given their expertise, they have already gone through tons of similar documents in the past, and their insights will prove to be helpful in ways more than one. They can provide an analysis of the document, which might be difficult for an ordinary buyer. They can help in carrying out the necessary assessment, which will be instrumental towards determining the fees that you have to pay.
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photo: courtesy of cbc.ca
Alberta Housing Outlook
Two industries will be major influences in the house market within the next two years. These will be the Oil and Manufacturing industries. As oil production and refinery will witness a decline of demand in their corresponding states, the economic conditions will become affected. More specifically, the world’s oil price will be lesser which should affect the lucrativeness of the oil producing provinces’ housing areas. This includes Alberta.
The redeeming factor would, however, involve Manufacturing as lower overhead, and raw material costs will serve as a profit advantage for companies. With lower costs of goods sold, their corresponding provinces which include British Columbia and Ontario will have better chances of household prospects. Eventually, Alberta will rebound from the oil price challenge, and this is expected to happen in 2017.
The oil price challenge inevitably affected the energy industry as lay-offs resulted from the low demands of gas production. As a result, migrations and pending power will decrease from 2015 to 2017. When it comes to house formats, both Single and Multiple Family home formats will
Witness much lower unit demands in Alberta. Their prices will then be on the buyer’s favor given the market conditions.
It is expected for unemployment figures to rise due to the shift of Alberta’s industry employment rates. The unemployment rate will specifically increase at 5.9% and eventually decline to 5.7% in 2017. As a result, migration flow will slow down with an estimated at 37,200 in 2016.
However, since it is forecasted for the Canadian economy to eventually grow, it would perhaps be a good idea to consider a home in Edmonton in the middle of a buyer’s market. This way you have a chance to have a house in a good location, right when the market eventually picks itself up. Prepare your budget within a price range of $373,600 and $409,600 in 2016, while you can expect to pay $379,000 and $419,800 in 2017.
Trends That Will Influence Housing in Alberta
In reference to the decline of the World’s oil prices, it is expected for the Canadian economy to improve within a span of two years. Within 2015 to 2017, the labor market will be at a stable pace, if not on a percentage increase when it comes to wages. Hourly earnings will also rise up at 2.7 per cent. These should further engage workers to prospect their options on homes/houses. Certainly, the provinces’ gross domestic product will be on the rise despite the oil challenge.
Furthermore, Canada’s GDP will remain resilient with a 1.1% growth during 2015 and 2% in 2016. The rates were much lower than the usual 2.4%, but the redeeming bounce back in 2017 will achieve a rate of 2.6%. According to Bank of Canada, the economy will leap back within two years and will continue to run in full capacity.
As the whole economy rebounds in 2017, home buyers must expect mortgage packages to be competitively priced, although they will not also lower at that time. Rates will, in fact, increase, so discretion is required for investors given these market conditions.
More detailed information can be found at cmhc.ca
For a market outlook on your Edmonton community click here to receive a Market Snapshot
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Photo: courtesy of usnews.com
Over the years, FSBO (For Sale by Owner) has been a popular route for people who intend to sell their homes in Edmonton, Alberta. To make this easier, follow the tips mentioned below.
1. Pick your Timeline
One of the first things that you need to do is to determine when to sell. Make sure to have it sold once you are ready, meaning, you already have a new place to stay. More importantly, it should be sold when the market is attractive, making it easier to attract buyers.
2. Evaluate the value of your House
This is not one thing that you can do on your own. You need to hire an appraiser to give you an idea how much you can have your house sold.
3. Clean your Home
This does not need to be a do it yourself task. You can hire services of professional cleaners to tidy up the house and make it more attractive for prospects.
4. Home Inspection
Carefully go through the different parts of the house and spot any potential problem that needs to be addressed.
5. Make it Move-In-Ready
After the inspection, pay attention to repairing any problem, such as plumbing or electrical wirings.
6. Get Your House Staged
The main goal of home staging is to make it more presentable, giving buyers the reason to love it. There are many professional home stagers in Edmonton, Alberta who can help you. It is considered to be a form of visual merchandising, and it relies heavily on interior design in order to attract buyers. It is like dressing your home to create a positive impression and to have a higher value.
7. Know your Selling Points
This is another important thing to do if you opt for FSBO (For Sale by Owner). You need to highlight the strong points of your home, giving it an edge above other options available in the real estate marketplace. For instance, you should highlight having a swimming pool or a huge backyard if you have one. You can also emphasise location and accessibility. Being situated in a safe neighbourhood could be another selling point.
8. Market Your Home
There are many free online marketing tools that can help you to sell your house faster. Facebook, Instagram, Twitter, and Craigslist are just some of the best choices. The best way to market your home, however, is through word of mouth. It will help if you have an extensive network, making it easier to find prospects.
9. Know How to Show your House
Showing your property to interested clients in Edmonton, Alberta will be an opportunity to give them reasons why they should have it purchased. Make sure that it is clean and organised. Turn on the lights to highlight the different features of the house. Ask them if they would like to be guided during the tour of the house or if they would want to do so on their own. Be prepared to answer questions they might possibly have. Always be polite, energetic, and more importantly, positive. Be in the right mood to create a favourable impression, increasing the likelihood that you will be able to sell your house.
10. Be Prepared for Negotiation
This is the trickiest part of the process. Do not easily give in to the demands of the client as this may make you end up selling at a loss. Choosing FSBO (For Sale by Owners) means that there will be no third-party to represent you. Make sure to understand the different terms that are essential. To sell your house successfully, see to it that you will come up with terms that will be agreeable for both parties. It is also important to know when you should stop negotiating and proceed in looking for other interested buyers.
If you would like a free Market Evaluation on your home click here
RE/MAX River City
What is the value of your home?
FIRST, you need to understand "Market Value". The single most important factor to determine before selling your home. Market value is determine by similar homes in features, size, age, upgrades and style during your present market. Knowing your real estate can be a huge insight and the difference between selling and being stuck on the market.
SECONDLY, there are 3 types of real estate markets; Balanced, Seller's and Buyer's Advantage.
A "Balanced Market" is when supply and demand are equal. In other words, the amount of listings on the market and the amount of Buyer's looking to purchase are equal.
"Seller's Advantage" is when there is not enough supply and much more demand. This is where homes sell quickly at a much higher price. Since there is a higher demand and a limited supply of listed homes, this market can be very favourable to the Seller.
"Buyer's Advantage" is a market where there is a greater supply of homes and far less demand. Currently in the Edmonton market, homes have been flooding the market and interest rates have dropped to encourage Buyers. This is a case where there is too much inventory of homes for sale and not enough Buyers. This creates inventory that is counted by the month. Anything more than 2 months of inventory is consider a Buyers market.
And THIRD, How can you get your home evaluated? Of course coming from me (a licensed REALTOR®), I would suggest getting a home evaluation from a licensed real estate professional. This will provide you with all the information on the market value of your home and also what list price to put on your home. By the way this is free. A second way, get your home appraised by an appraisal company. This will cost you a few hundred dollars. This is a great option if you have done extensive renovations or you're refinance your home.
Thank you for reading my blog, I would be happy to write a detailed home evaluation on your home. Click here and I'll get started today.
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Price:$269,700 ~ Bdrms: 2+1 ~ Brms: 2 ~ MLA: 1800 sqft ~ Lot Size: 30,000 sqft
Enjoy the beauty of this home with its sleek open concept and modern features. Upon entry, your first impressions will be delighted with a custom staircase where a gorgeous chandelier rests above. Near the top of the door, a beautiful large window allows for natural light to shine. This move-in-ready modern home includes a new roof, new windows, decks, floors, doors, faucets, light fixtures and many others. The backyard opens to a spacious green patch to enjoy the summer days while keeping your privacy. Priced to sell. Book your viewings today!
Licensed Real Estate Professional
How can you sell your home faster in todays market? Get your home pre-inspected by a professional service.
Most of the time, home sellers put their properties on the market without thinking of ways on how to enhance their properties first. They always want to sell their properties a lot faster but end up getting deal cancellations and negotiations for lower prices. This makes pre-inspection important. Here are some other reasons why:
Help you identify potential problems and find solutions before selling it: A pre-inspection will help you get a heads up for possible problems. The inspection will help you find issues including basement leaks, not working faucets and the like. It is important to address them immediately, for one: it can be a little embarrassing when your clients find out these stuffs before you do. And two: to boost the value of your home.
Add value to your house: Aside from identifying what needed to be fixed, a pre-inspection can help you identify things that need upgrades too. You can easily point out some renovation or repairs you can do to add value to your house.
Increase price: You can easily demand high prices for houses with excellent value. A pre-inspection will help you identify a reasonable pricing you may tag with your property.
Most of the sellers, today give clients a fixed price without even assessing if the prices they give are reasonable. Some buyers end up getting frustrated especially if they found out that the properties they bought needs serious repair, and the seller did not note that. So it is important to inspect the house prior to selling to avoid unsatisfied and unhappy clients. Sometimes buyers would complain and file lawsuits and claim that they have been deceived.
Avoid deal cancelations: If you do not do pre-inspection when you sell your house, chances are the buyer may hire an expert to do it before they buy your property. Usually, if they find something that needs to be fixed, your buyer will try to negotiate and get your property for a much lower price. This also causes unsuccessful deals.
Give you and the buyer peace of mind: The pre-inspection is a good move to demonstrate that you are open and upfront about your property. Being open and being honest are two of the most admirable traits to buyers. It is important to get the trusts of clients even before they plan to buy your property. Highlighting that you have conducted a pre-inspection prior to the sale can gain trust from your buyer.
Planning to sell your home? Hire an expert to do the pre-inspection today!
Licensed Real Estate Professional
Mortgage Insurance VS Individual Insurance. Protect Your Mortgage For Less Cost. Halifax Real Estate
If you are buying a home, you will likely be advised on the importance of insuring your mortgage. Most homebuyers, particularly first-timers, already have too many tasks and important decisions during the buying process and overlook insurance. Thus, knowing the best insurance option to choose for your mortgage is critical for protecting your property.
Essentially, mortgage insurance is provided by the financial company that is lending your money for the mortgage. That is why premiums will be added to your monthly mortgage payments. This is not recommended as it may push you into defaulting due to the high monthly payments that you will have to make.
There is a much better option when buying a home, and that is using individual insurance from an agent or insurance broker. Either way, you will gain from having your mortgage fully paid off so that your family can still retain the house even if you pass on. There are great differences between these two options.
When you go with individual life insurance for your real estate, your premiums are fixed for a certain amount of time, which is basically during the term of the mortgage. In contrast, the premiums for mortgage insurance normally increase after a certain specified period, generally after 5 years. This can affect you negatively, particularly if your finances don’t necessarily improve after 5 years.
The other major differentiating factor when buying a home with individual life insurance is basically that you own full rights to the policy. Conversely, the bank owns the mortgage insurance policy and this means it has full control. However, when you use the life insurance option, you will be able to have full control over all the various policy options.
Individual life insurance is more flexible than mortgage insurance in any real estate since you can get better premiums based your health, age and sex. In contrast, mortgage insurance has blended premiums such that both non-smokers and smokers pay similar rates with no differences. The other way that life insurance offers flexibility to the users is that you may get the chance to convert the term insurance into a permanent insurance while its competitor cannot be converted.
People who choose life insurance when buying a home can purchase the amount of insurance cover they need. However, for mortgage insurance the face value of the coverage is just for the precise amount in the mortgage. Thus, the coverage will be terminated once the repayment ends. The life coverage plan is completely portable irrespective of the amount of the mortgage.
In short, life insurance is simply much better than mortgage insurance in any real estate and will save you money, in the long run.
Licensed Real Estate Professional